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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: energyplay who wrote (81957)3/27/2007 9:55:35 AM
From: Elroy Jetson  Read Replies (1) of 206182
 
The octane level for straight Ethanol is 113, so there is some merit there.

And the economics would be different once ethanol is made from cellulose converted into sugars, instead of starch or sugar. That way an entire plant can be used instead of just a small part. But you still face the problem of fertilizers, crop rotation or yield decline. It will take a lot of plant to supply our energy needs.

But I'd also like to comment about farmers. The problem with their economics is competition, what economists call atomistic competition. No matter what bonanza comes there way, there are so many farmers, they compete with each other until there is barely enough profit left to survive.

The reason food processors make so much more is that there are very few of them, oligopolies or monopolies. This is why businesses in every industry always want to consolidate. Yes, it sometimes also lowers their costs. But the important part is they can charge more because they have fewer competitors.

Throwing an uneconomic ethanol industry the farmer's way will not change this. Ethanol producers, say Cargill, will make a lot of money over the entire program life. But farmers will experience a windfall for only a short period of time until their competition with each other drives the profit out of corn again.

Businessmen know that competition is not their friend. This is why there are so few integrated oil companies, and becoming fewer as time goes on.
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